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Chapter 1

Consumer Behavior: Its


Origins and Strategic
Appliances

Why Study Consumer Behavior?


What consumers think of our products and those of our
competitors.
What they think of possible improvements in our
products.
How they use our products.
What attitudes they have about our products and our
advertising.
What they feel about their roles in the family and society.
What their hopes and dreams are for themselves and for
their families.

Digital Revolution in the


Marketplace
Allows customization of products, services,
and promotional messages like never before
Enhances relationships with customers
more effectively and efficiently

Changes in the Business Environment


Increased consumer Access to customer
patterns and
power
preferences
Access to
Evolution to other
information
-Web
connection
More products and
i-Pad
services
LED
Interactive and
Utility Mobile
instant exchanges

Consumer Behavior
The behavior that consumers display
in searching for, purchasing, using,
evaluating, and disposing of products
and services that they expect will
satisfy their needs.

Broader View of Consumer Behavior


Consumer behavior is the study of
individuals, groups, or organizations and
the processes they use to select, secure, use,
and dispose of products, services,
experiences, or ideas to satisfy needs and
the impacts that these processes have on the
consumer and society.

Personal Consumer
The individual who buys goods and
services for his or her own use, for
household use, for the use of a family
member, or for a friend.

Organizational Consumer
A business, government agency, or
other institution (profit or nonprofit)
that buys the goods, services, and/or
equipment necessary for the
organization to function.

Development of the Marketing


Concept
Production
Concept
Product Concept
Selling Concept
Marketing
Concept

The Production Concept


Assumes that consumers are interested
primarily in product availability at low
prices
Marketing objectives:
Cheap, efficient production
Intensive distribution
Market expansion

The Product Concept


Assumes that consumers will buy the
product that offers them the highest quality,
the best performance, and the most features
Marketing objectives:
Quality improvement
Addition of features

Tendency toward Marketing Myopia

The Selling Concept


Assumes that consumers are unlikely to buy
a product unless they are aggressively
persuaded to do so
Marketing objectives:
Sell, sell, sell

Lack of concern for customer needs and


satisfaction

The Marketing Concept


Assumes that to be successful, a company
must determine the needs and wants of
specific target markets and deliver the
desired satisfactions better than the
competition
Marketing objectives:
Profits through customer satisfaction

The Marketing Concept


A consumer-oriented philosophy that
suggests that satisfaction of consumer
needs provides the focus for product
development and marketing strategy to
enable the firm to meet its own
organizational goals.

Implementing the Marketing


Concept

Consumer Research
Segmentation
Targeting
Positioning

Consumer Research
The process and tools used to study
consumer behavior.
Two perspectives:
Positivist approach
Interpretivist approach

Segmentation, Targeting, and


Positioning
Segmentation: process of dividing the
market into subsets of consumers with
common needs or characteristics
Targeting: selecting one or more of the
segments to pursue
Positioning: developing a distinct image for
the product in the mind of the consumer

Successful Positioning
Communicating the
benefits of the
product, rather than
its features

Communicating a
Unique Selling
Proposition for the
product

Successful Relationships

Customer
Value
Customer
Satisfaction

Customer
Retention

Types of Customers
Loyalists
Apostles
Defectors

Terrorists
Hostages
Mercenaries

Customer Profitability-Focused
Marketing

Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead

The Societal Marketing Concept


All companies prosper when society
prospers.
Companies, as well as individuals, would be
better off if social responsibility was an
integral component of every marketing
decision.
Requires all marketers adhere to
principles of social responsibility.

External Influence

Process

Consumer Decision Making

Output

Post-Decision
Behavior

Input

Firms Marketing Efforts


1. Product
2. Promotion
3. Price
4. Channels of distribution

Need
Recognition
Prepurchase
Search
Evaluation of
Alternatives

Purchase
1. Trial
2. Repeat purchase
Postpurchase Evaluation

Sociocultural Environment
1. Family
2. Informal sources
3. Other noncommercial
sources
4. Social class
5. Subculture and culture

Psychological Field
1. Motivation
2. Perception
3. Learning
4. Personality
5. Attitudes
Experience

A Model of
Consumer
Decision
Making